The current energy crisis is shaping up to be far more damaging to the economy than the pandemic and its restrictive measures, says presidential adviser Cosmin Marinescu.

“Beyond its inflationary impact, the current energy crisis is far more harmful to the economy than the pandemic and its restrictive measures. In Romania, the sharp rise in energy prices is the result of both external factors and the exponential rise in emissions certificates, as well as internal factors, such as the unnaturally high share of energy traded on the spot market (DAM), as we showed in the analysis published at the beginning of the energy crisis,” wrote on his blog Cosmin Marinescu.

He believes that, at European level, the way to resolve the energy price crisis will also foreshadow the economic future of the Union. “Perhaps it is time for a fine-tuning of the European ‘greening’ calendar or even a reassessment of the tools and mechanisms by which we choose to take the green transition path, one that seems increasingly ambitious and challenging – in the mirror of the times,” Marinescu said, according to Agerpres.

He also said that Romania must ensure that the efforts needed for the green transition do not benefit “our competitors on the world market”, while the bill burdens European citizens and economies.

“Regardless of the scenarios, we need to make sure, however, that the efforts needed for the green transition do not benefit our competitors on the world market, while the bill is burdening European citizens and economies. It is becoming increasingly clear that, in relation with the energy crisis, today’s decisions shape the EU’s position on the map of global competitiveness for decades to come,” he said.

In his post, Marinescu welcomed the recent decision of the European Commission to adopt the Delegated Act on the inclusion of nuclear energy and natural gas in the European taxonomy.

“This decision is also the result of the steps that Romania has consistently taken at the level of the European Council. This opens up essential opportunities for the coming years, which can ensure the strengthening of the Union’s energy security through the wise and balanced exploitation of EU energy sources. It is a very important moment, we could even say decisive, for the rapid implementation of Romania’s strategic projects, both in the field of offshore natural gas and in the field of nuclear energy,” wrote Cosmin Marinescu.

The unprecedented rise in energy prices in the EU shows that, regardless of energy sources, most Member States face the same problem, says the presidential adviser. “The perpetuation of the current energy crisis may pose a risk for many European industries to relocate and develop new production capacity outside the Union,” Marinescu said.

Furthermore, he argues that the EU’s strong dependence on energy imports has continued, despite the fact that over the last 10 years, renewable energy production has grown steadily across the Union.

According to the presentation posted on the blog, the degree of dependence on energy imports is high, 57.5% for the EU and 62.1% for the euro area. He also points out that this energy price crisis has hit unexpectedly hard also the countries with relatively low levels of energy dependence, such as Romania.

In terms of natural gas production in the EU, it is relatively low, given that the EU imports 84% of natural gas, 96% of oil and 36% of coal consumed in the EU. Thus, it becomes imperative that EU policies be pragmatically oriented towards supporting projects for the exploitation of existing energy sources in the territory of the Member States, says Marinescu.

With regard to the import of natural gas, the adviser’s presentation shows that in 2020 Germany imported the largest amount of natural gas, followed by Italy and the Netherlands. “There is a risk that, in the wake of rising energy prices and prices remaining at a high level, Europe’s strongest industries will resort to relocating or investing in new production capacity outside the EU,” he said.

In 2020, the Russian Federation accounted for 43% of EU imports. In practice, the EU gas sector (which promotes competition and transparency) is dominated by the price imposed by a third country, through Gazprom (through non-competitive and non-transparent practices). According to the quoted source, this energy dependence is extremely worrying, in the context of the lack of EU priorities for the exploitation of internal gas resources.

In the European Union, nuclear energy is the main source of generation for gross electricity production, followed by natural gas generation.

“In the last 10 years, most EU countries have significantly increased their production of renewable energy, with considerable differences between the types of renewable energy installed, depending on geographical determinants. The champions of renewable energy are Denmark – with an increase from 33%, to 65% and Germany, with an increase from 18% to 45%. On the 8th position, Romania still has an untapped potential in the field of renewable resources,” Marinescu shows in his presentation.

In the case of hydropower, between 2010 and 2020, the production of energy from hydropower has decreased considerably in most Member States, amid declining rainfall. Despite these declines, the top 5 states support an increase in renewable energy capacity. “Romania’s hydrographic potential needs to be capitalized on through significant investments in the modernization and exploitation of new production capacities,” the official said.

In contrast to hydropower, wind energy production between 2010 and 2020 has increased substantially in most Member States. In the first place are the Nordic countries: Denmark, with an increase from 20% to 57%, Ireland, with an increase from 10% to 36% and Lithuania, with an increase from 4% to 30%.

In the case of photovoltaics, about 5% of the electricity generated in the EU comes from such sources, with electricity production on an upward trend in most Member States, but not as spectacular as in the case of wind energy. In the first place are the geographically favored southern states: Malta, with an increase from 0% to 11%, Greece, with an increase from 0% to 9% and Italy, with an increase from 1% to 9%.